Exhibit 10.32
CREDIT ENHANCEMENT FEE AGREEMENT
(Bank Credit Agreement)
THIS CREDIT ENHANCEMENT FEE AGREEMENT (this "Agreement") is
entered into on this 29th day of October, 1998, by and among BANKERS TRUST
COMPANY as Administrative Agent for the Banks as defined below, each Bank party
to the Credit Agreement defined below as of the date thereof (other than any
Bank which has no Tranche A-2 Term Loans, Tranche B-2 Term Loans or Revolving
Loan Commitment), XXXXXX'X OPERATING COMPANY, INC., a Delaware corporation
("HOC") and XXXXXX'X ENTERTAINMENT, INC., a Delaware corporation ("HET").
Capitalized terms used herein and not defined shall have the meanings set forth
in the Credit Agreement.
R e c i t a l s:
X. Xxxxxx'x Jazz Company, a Louisiana general partnership
("HJC"), filed a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code on November 22, 1995, which case is now pending in the
United States Bankruptcy Court for the Eastern District of Louisiana, Case No.
95-14545.
B. HJC has submitted, and the United States Bankruptcy Court
for the Eastern District of Louisiana has confirmed, a plan of reorganization
(the "Plan").
C. As contemplated by the Plan, Jazz Casino Company, L.L.C., a
Louisiana limited liability company (the "Company"), has succeeded to all the
rights and obligations of HJC.
D. Contemporaneously herewith JCC Holding Company, a Delaware
corporation, as guarantor, the Company, the Administrative Agent and certain
financial institutions (the "Banks") have entered into the Credit Agreement,
dated as of October 29, 1998 (the "Credit Agreement"), providing for (i) senior
secured Tranche A-1 term loans in the aggregate principal amount of Ten Million
Dollars ($10,000,000) (the "Tranche A-1 Term Loans"), (ii) senior secured
Tranche A-2 term loans in the aggregate principal amount of up to Twenty Million
Dollars ($20,000,000) (the "Tranche A-2 Term Loans"), (iii) senior secured
Tranche A-3 term loans in the aggregate principal amount of Thirty Million
Dollars ($30,000,000) (the "Tranche A-3 Term Loans"), (iv) secured term loans in
the amount of Thirty Million Dollars ($30,000,000) (the "Tranche B-1 Term
Loans"), (v) secured Tranche B-2 term loans in the amount of up to One Hundred
Twenty-One Million Five Hundred Thousand Dollars ($121,500,000) (the "Tranche
B-2 Term Loans") and (vi) a revolving credit facility in the amount of Twenty
Five Million Dollars ($25,000,000) (the "Revolving Credit Facility").
E. As an inducement for HET and HOC to enter into the HET/HOC
Guaranty and Loan Purchase Agreement, HOC shall receive (and retain for its own
account or distribute
portions of same to HET, all as may be agreed between HOC and HET) a credit
support fee as set forth herein (the "Credit Support Fee").
F. The parties hereto desire to enter this Agreement regarding
the Credit Support Fee.
A g r e e m e n t:
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Guarantee. Each of HOC and HET has been requested to, and
has, entered into the HET/HOC Guaranty and Loan Purchase Agreement providing for
the guarantee and purchase of certain debts of the Company, including (i) the
Tranche A-2 Term Loans, (ii) the Tranche B-2 Term Loans and (iii) the Revolving
Credit Facility (collectively, the "Guaranteed Borrowings").
2. Credit Support Fee. (a) In consideration of the obligations
of HOC and HET set forth in the HET/HOC Guaranty and Loan Purchase Agreement,
each Bank hereby severally agrees to pay to HOC a Credit Support Fee equal to
the remainder (if positive) of (i) interest and Letter of Credit Fees actually
paid to the Administrative Agent for the benefit of such Bank in respect of
Tranche A-2 Term Loans, Tranche B-2 Term Loans (in the case of Tranche B-2 Term
Loans, only in respect of the aggregate outstanding principal amount thereof
from time to time in excess of $10,000,000), Revolving Loans, Swingline Loans
and Letters of Credit, as the case may be, for any period, minus (ii) the amount
of such interest and Letter of Credit Fees for such period calculated as if (x)
in the case of Base Rate Loans, the rate of interest applicable thereto were the
Base Rate plus the HET Base Rate Applicable Margin (as defined below), each as
in effect from time to time during such period, (y) in the case of Eurodollar
Loans, the rate of interest applicable thereto were the Eurodollar Rate plus the
HET Eurodollar Applicable Margin (as defined below) in effect from time to time
during such period and (z) in the case of Letter of Credit Fees, such fees
accrued at a rate per annum equal to the HET Eurodollar Applicable Margin in
effect from time to time during such period; provided, however, that no Credit
Support Fee shall accrue or be due and payable (i) with respect to the Revolving
Credit Facility (including Revolving Loans, Swingline Loans and Letters of
Credit issued thereunder), until the Carry Obligation Termination Date or (ii)
at any time during which HOC or HET is in default of any of its obligations
under the HET/HOC Guaranty and Loan Purchase Agreement or any Guarantor Event of
Default under, and as defined in, the HET/HOC Guaranty and Loan Purchase
Agreement is then in existence; provided further, that in no event shall the
amount of any Credit Support Fee paid by the Banks to HOC hereunder exceed 2.0%
per annum (which 2.0% per annum amount shall be reduced, (1) with respect to
Base Rate Loans, from time to time to the extent that the remainder of (x) the
rate of interest actually applicable to such loans less (y) the sum of the Base
Rate plus the HET Base Rate Applicable Margin as from time to time in effect, is
less than 2% and (2) in all other cases, for any period during which the HET
Eurodollar Applicable Margin exceeds 1.5%, by a percentage per annum equal to
such excess), unless the
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increase in such Credit Support Fee is directly attributable to a decrease in
the HET Eurodollar Applicable Margin to a rate per annum which is less than 1/2
of 1.0%. As used herein (x) "HET Eurodollar Applicable Margin" shall mean the
HET Applicable Margin (as defined in the Credit Agreement) from time to time in
effect; provided that if the HET Credit Agreement is at any time, or from time
to time, after the Effective Date amended, amended and restated or replaced with
a successor (or successive successor) credit or loan agreements, which in the
case of any such amended, amended and restated or successor agreement provides
for a higher "Applicable Margin" (or other spread, however defined or
designated) above the Eurodollar Rate (or other similar reference rate) than the
HET Applicable Margin, such higher "Applicable Margin" (or other spread) shall
instead be deemed to constitute the HET Eurodollar Applicable Margin for so long
as same remains in effect (and after any termination thereof unless replaced
with a similar credit facility), and (y) "HET Base Rate Applicable Margin" shall
mean, at any time, the greatest of (i) the HET Eurodollar Applicable Margin then
in effect less 1%, (ii) at any time when the HET Credit Agreement has been
amended, amended and restated or replaced with a successor (or successive
successor) credit or loan agreements which in any case provide for a borrowing
spread (however defined or designated) for base rate or prime rate loans
(however defined or designated) in excess of 0%, such borrowing spread and (iii)
0%.
(b) The Credit Support Fee shall be calculated without taking
into account (i) any amounts paid or payable to the Banks under Section 1.08(c)
or the proviso in Section 2.05(a) of the Credit Agreement (or any successor
provisions), (ii) any amounts paid or payable to the Banks in respect of Tranche
A-2 Term Loans, Tranche B-2 Term Loans, Revolving Loans, Swingline Loans or
Letters of Credit pursuant to any of Sections 1.10, 1.11, 2.06 or 4.04 of the
Credit Agreement or any other provision providing for payments of increased
costs or indemnifications with respect to Tranche A-2 Term Loans, Tranche B-2
Term Loans, Revolving Loans, Swingline Loans or Letters of Credit, as the case
may be, or (iii) any fees (including Facing Fees) paid or payable to the
Administrative Agent, the Issuing Bank or any Bank, other than Letter of Credit
Fees under Section 3.01(c)of the Credit Agreement (or any successor provision).
(c) Notwithstanding Section 2(a) above, payment of the Credit
Support Fee shall be expressly junior and subordinate in right of payment on the
terms, and to the extent, set forth in Sections 13 and 15 of the Credit
Agreement. Each of HOC and HET confirms that it has reviewed such Sections 13
and 15 and agrees to be bound thereby.
(d) Each Bank authorizes the Administrative Agent to pay the
portion of the Credit Support Fee allocable to such Bank directly to HOC as
provided in Section 1.08(f) of the Credit Agreement.
(e) Notwithstanding Section 2(d) above, the Administrative
Agent is under no obligation to HOC, HET, the Company, any Bank or any other
Person to make the payments described in Section 2(d). Payment to HOC of the
Credit Support Fee is solely the obligation (on a several basis) of the Banks
and HOC agrees that in the event of any non-payment of the Credit Support Fee
HOC's sole recourse shall be against the respective Bank and any such
non-payment
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shall have no effect on the obligation of HET or HOC under the HET/HOC Guaranty
and Loan Purchase Agreement.
(f) Notwithstanding anything to the contrary contained above,
to the extent (x) Revolving Loans, Swingline Loans and Letters of Credit are at
any time outstanding prior to the Carry Obligation Termination Date and/or (y)
Tranche B-2 Term Loans are outstanding from time to time (with the principal
amount used for purposes of this clause (y) to be limited to the lesser of the
actual aggregate principal amount of Tranche B-2 Term Loans from time to time
outstanding or $10 million); in each case bearing interest or Letter of Credit
Fees, as applicable, at rates per annum less than the rates specified in the
first clause (ii) of Section 2(a) of this Agreement (determined without regard
to the provisos thereto), then HOC and HET hereby jointly and severally agree
that, from Credit Support Fees and fees received or to be received from them
hereunder and under the Credit Enhancement Fee Agreement (JCC) (in each case, as
and when received), HET and HOC shall pay to the respective Banks amounts equal
to the difference between the amount of interest and/or Letter of Credit Fees
received by them and the respective amounts such Bank would have received had
such amounts borne interest or Letter of Credit Fees, as the case may be, at the
rates specified in the first clause (ii) of Section 2(a) of this Agreement
(determined without regard to the provisos thereto). Any amounts payable
pursuant to this clause (f) shall be paid to, or withheld from fees otherwise
payable to HET and HOC hereunder by (but with no obligation on the part of the
Administrative Agent to withhold such amounts), the Administrative Agent and
paid by it to the Banks entitled thereto; provided that if there are
insufficient funds to pay all such amounts, any amount distributed pursuant to
this sentence shall be paid to the Banks on a ratable basis (based on the
relative amounts owed to the various Banks pursuant to this clause on the date
of the respective distribution) as determined in good faith by the
Administrative Agent.
3. Interest Rate. If not paid within three Business Days after
the due date thereof (which due date shall be (x) in the case of amounts to be
paid to HOC hereunder, the date of the actual receipt by the Administrative
Agent or the respective Bank of interest or Letter of Credit Fees under the
Credit Agreement, in each case to the extent constituting Credit Support Fees in
accordance with the provisions of Section 2 hereof and (y) in the case of
amounts owing to the Banks pursuant to Section 2(f) hereof, the respective date
or dates upon which the amounts to be paid to the Banks are received by HET or
HOC under this Agreement or the Credit Enhancement Fee Agreement (JCC)), unpaid
amounts of the Credit Support Fee, or fees payable pursuant to Section 2(f), as
the case may be, shall bear interest from such due date until paid in full at
the Base Rate (as defined in the HET Credit Agreement) as in effect from time to
time.
4. Amendments to Credit Documents. Each of HET and HOC
acknowledges and agrees that the Credit Agreement and related Credit Documents
may be amended in accordance with the respective terms thereof, whether or not
such amendment has the effect of reducing or delaying the amount of Credit
Support Fees payable hereunder.
5. Term and Termination. This Agreement shall terminate on the
first date after the date hereof upon which (A) (x) all Tranche A-2 Term Loans,
Tranche B-2 Term Loans,
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Revolving Loans and Swingline Loans have been repaid in full, all Letters of
Credit have terminated and all Unpaid Drawings with respect thereto have been
repaid in full, and all Commitments under the Credit Agreement shall have
terminated, in each case so long as all Credit Support Fees payable in
accordance with the terms hereof have in fact been paid or (y) such earlier
date upon which all Guaranteed Obligations, under, and as defined in, the
HET/HOC Guaranty and Loan Purchase Agreement have been purchased in
accordance with the requirements of Section 15 thereof and (B) all amounts
actually owing to the Banks pursuant to Section 2(e) have been paid.
6. Miscellaneous
(a) Entire Agreement. This Agreement and, to the extent
specified, the Credit Agreement represent the entire agreement and understanding
of the parties hereto with respect to the subject matter hereof, and all prior
agreements, understandings, representations and warranties in regard to the
subject matter hereof are and have been merged herein and are superseded hereby.
(b) Governing Law. This Agreement and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of New York.
(c) Notices. The address of the Administrative Agent, each
Bank and HOC shall for all purposes be as provided with respect to the Credit
Agreement or the HET/HOC Guaranty and Loan Purchase Agreement, as the case may
be, unless otherwise changed by the applicable party hereto by notice to the
others as provided herein.
All notices or other communications required or permitted to
be given pursuant to the provisions of this Agreement shall be in writing and
shall be considered as properly given if mailed by certified United States mail,
postage prepaid, with return receipt requested, by overnight courier service, or
by facsimile transmission with reception confirmed. Notices hereunder in any
manner shall be effective only if and when received by the addressee. Certified
mail receipt or express courier receipt at the above addresses shall establish
receipt for purposes of notices under this Agreement. Either party may from time
to time, by notice in writing served upon the other as aforesaid, designate a
different mailing address to which, or a different person to whose attention,
all such notices or demands are thereafter to be addressed.
(d) Successors and Assigns. HOC shall not assign its rights
and obligations under this Agreement without the prior written consent of the
other parties hereto, except that HOC may assign all or any portion of its right
to receive funds pursuant to this Agreement. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their successors, assigns, heirs, legal representatives, executors and
administrators. Without limiting the generality of the foregoing, to the extent
any Bank assigns any of its Tranche A-2 Term Loans, Tranche B-2 Term Loans or
Revolving Loan Commitment pursuant to Section 16.04 of the Credit Agreement,
such Bank shall be released from any further liability under this Agreement in
respect of the assigned Loans and Commitment from and after the date of such
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assignment, and the assignee of such Loans and Commitment shall succeed to the
obligations of the released Bank in respect thereof under this Agreement.
(e) Grammatical Changes. Whenever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter
gender as the circumstances require.
(f) Captions. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
(g) Severability. If any provision of this Agreement, or the
application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby; provided that the parties shall attempt to reformulate
such invalid provision to give effect to such portions thereof as may be valid
without defeating the intent of such provision and the economic burdens and
benefits of this Agreement are not impaired.
(h) Counterparts. This Agreement, or any amendment hereto, may
be executed in multiple counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same instrument, notwithstanding
that all of the parties hereto are not signatories to the original or the same
counterpart. In addition, this Agreement, or any amendment hereto, may contain
more than one counterpart of the signature pages, and this Agreement, or any
amendment hereto, may be executed by the affixing of the signatures of each of
the parties hereto to one of such counterpart signature pages; all of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
(i) No Third Party Rights. This Agreement is for the sole and
exclusive benefit of the parties hereto designated herein and no other Person
(including any creditors of the parties hereto) shall under any circumstances be
deemed to be a beneficiary of any of the rights, remedies, terms and provisions
of this Agreement.
(j) Attorney's Fees. If any party hereto brings any
judicial action or proceeding to enforce its rights under this Agreement, the
prevailing party shall be entitled, in addition to any other remedy, to
recover from the others, in any proceeding prosecuted to judgment, all costs
and expenses, including without limitation reasonable attorneys' fees,
incurred therein by the prevailing party.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement effective as of the day and year first above written.
BANKERS TRUST COMPANY, Individually and
as Administrative Agent
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
XXXXXX'X OPERATING COMPANY,
INC., a Delaware corporation
By /s/ Xxxxxx X. Xxxxxxxx XX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx XX
Title: X. X.
XXXXXX'X ENTERTAINMENT, INC.
By /s/ Xxxxxx X. Xxxxxxxx XX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx XX
Title: X. X.
XXXXXX XXXXXXX PRIME INCOME TRUST
By /S/Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Director
